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2016 (5) TMI 261 - ITAT DELHI

2016 (5) TMI 261 - ITAT DELHI - TMI - Undisclosed income of the assessee - statement recorded during the survey u/s. 133A - Held that:- Addition made on the basis of the statement in the present case recorded u/s. 133A is not sustainable in the eyes of law, hence, we delete the addition of ₹ 1.25 crores made by the AO and confirmed by the Ld. CIT(A) - Decided in favour of assessee - I.T.A. No. 1787/DEL/2014 - Dated:- 28-4-2016 - Shri H. S. Sidhu, Judicial Member And Shri Prashant Maharishi .....

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the case. 2. The brief facts of the case are that the assessee filed his return of income on 4.10.2010 declaring income at ₹ 4,43,912/-. In this case, survey u/s. 133A was carried out on 20.10.2008 wherein the assessee made a voluntary disclosure of additional income of ₹ 1,25,00,000/-, but the same was not declared by the assessee in his return. Accordingly, this case was take up for scrutiny and AO issued notice u/s. 142(1)/143(2) alongwith questionnaire dated 25.10.2010 for fixing .....

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nvestigation Department under pressure. It was also stated by him that no incriminating documents were found during the course of survey and therefore, he retracted from his declaration at that time and also at the time of filing the return. The AO considered the reply filed by the assessee alongwith other documentary evidence and held that the assessee has not shown any valid reason for not including ₹ 1.25 crores which he has voluntary surrendered in his return of income during the surve .....

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er having made surrender they had manipulated their accounts so as to negate the surrender which was voluntarily made. Finally, the AO added the amount of ₹ 1.25 crores as undisclosed income of the assesee, in addition to the income as returned by him and completed the assessment on 29.12.2011 u/s. 143(3)/147 of the I.T. Act. 3. Aggrieved with the action of the Assessing Officer, Assessee filed the Appeal before the Ld. CIT(A), who vide his impugned order dated 14.1.2013 has upheld the ass .....

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Author of the order) has held that the addition made by the AO on the basis of the statement recorded u/s. 133A of the I.T. Act, 1961 without bringing any corroborative material on record is not sustainable in the eyes of law. He further stated that the order dated 8.3.2016 the Bench has also held that the addition cannot be made on the basis of the statement recorded during the survey u/s. 133A of the I.T. Act in view of the various judicial decision wherein it has been held that the such stat .....

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angode Rubber Produce Co. vs. State of Kerala (1973) 91 ITR 18 (SC) - Ravinder Kumar vs. Deputy Commissioner of Income Tax (2008) 33 SOT 25 (Delhi High Court) - TDI Marketing (P) Ltd. vs. ACIT (2008) 28 SOT 215 (Delhi High Court) - Mahesh Ohri vs. ACIT (2013) 23 ITR 522 154 - CIT vs. P. Balasubramanian (2013) 33 taxmann.com 130 (Madras High Court) - ITO vs. Surrender Kumar Jain ITA No. 3871/Del/2011 - Gajjam Chinna Yellappa vs. ITO (2015) 370 ITR 671 (T&AP) (HC) - CIT vs. Uttam Chand Jain (2 .....

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as CBDT Instruction No. 286/2/2006/IT/(Inv) dated 10.3.2003; Declaration dated 18.12.2008 made during the proceedings u/s. 133A of the I.T. Act of estimated income; Withdrawal dated 16.12.2010 of surrender / declaration made during survey operation conducted u/s. 133A of the I.T. Act, 1961 ; Affidavit filed during the assessment proceedings before the AO. For the sake of convenience, we are reproducing the contents of Declaration; Withdrawal and the Affidavit filed by the assessee are as under: .....

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on 20-10- 2008/21-10-.2008 and certain records and documents were seized. I have been tendering the explanations/clarifications about various documents from time to time. I hereby declare that I shall pay income tax on Estimated Income, over and above my Normal Income, of ₹ 1,25,00,000/- (Rupees One Crore Twenty Five Lacs Only) and pay income tax thereon in due course of time. This income - will be as per the impounded documents, impounded computers and/or impounded record. I his estimated .....

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gainst me or any of my concern in which I have interest. Thanking You, Yours Faithfully, SD/- (AVINASH KUMAR SETIA) WITHDRAWAL DATED 16.12.2010 OF DECLARATION DATED 18.12.2008 AVINASH KUMAR SETIA C-142, G.F. , Sarvodaya Enclave, NEW DELHI - 110 017. To ASSISSTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-17 NEW DELHI. SIR, RE:- IN THE MATTER OF SH A VINASH KUMAR SETIA WITHDRA WAL OF SURRENDER DECLARATION MADE DURING SURVEY OPERATION CONDUCTED U/S 133A OF THE INCOME TAX ACT 1961 ================ .....

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Tax Authorities and to include additional estimated income in the return on the basis seized documents. This letter was filed to remove the pressure of the Income Tax Authorities and it does not represent true and correct picture of the affairs. Further it is also submitted. that there was no incriminating documents seized/found during the course of suggesting the undisclosed income of ₹ 1.25 crore in the hands of asseesse. This fact is also proved from the seized documents and books of a .....

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material including the books of accounts. Further your kind attention is invited to instructions No. 286/2/2003/IT(INV) dated 10th March, 2003.issued by of India, Ministry of Finance and Company affairs, Department of Revenue, CBDT which is reproduced as under:- ' "TO ALL CHIEF COMMISSIONER OF INCOME TAX (Cadre Control) & All Directors General of Income Tax. SIR, Subject: Confession of Additional income during search and seizure and survey operation - regarding Subject:- Confession .....

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operation do not serve any useful purpose. It is therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax department. Similarly, while recording the statement during the course of search & seizure and survey operation no attempt should be made to obtain confession as to the undisclosed income, Any action shall be viewed adversely. Furthe .....

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ted out by your goodself in the questionnaire issued by you to suggest that there was undisclosed income earned by the assesse during the captioned assessment year. It is submitted that as per instruction of CBDT on the captioned subject and also based on the various judgements, it is a well established precedence that in the absence of any evidence, no addition is required to be made for any adhoc declaration made by the assesse. And for this proposition of law we rely on the judgement :- b) Pa .....

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verse inference may kindly be drawn in this regard. Any other clarification if needed, the same shall be given at your convenience. Sd/- (Avinash Kumar Setia) CONTENTS OF THE AFFIDAVIT Before the Assessing Officer Affidavit in the matter of assessment proceedings under Income Tax Act Affidavit of Sh. Avinash Kumar Setia S/o Late Sh RC. Setia age 40 years RIo C .. 142, Ground Floor, Sarvodaya Enclave, New Delhi -110 017. I, the above named deponent, do solemnly affirm and state on oath as follows .....

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earch and seizure operation as evidence in any proceedings under the in Indian Income Tax Act. Section 133A, while authorizing recording of statement by the survey Officer, does not give the same status of "Evidence to such recorded statements". This have been pointed out in Paul Mathews & Sons VS. CIT (2003) 263 ITR 101. That it is therefore, open to the assessee to explain the statements recorded during the survey and bring out the following facts on record: a. That there was no .....

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unal vide order dated 8.3.2016 has dealt the similar issue and decided the same in favour of the assessee in the case of M/s IIBS Infonet (P) Ltd. vs. ACIT reported in 2016 (4) TMI 346 - ITAT, Delhi, (in which the Judicial Member is the Author of the order). For the sake of convenience, we are reproducing the relevant para no. 8 & 9 of the order dated 8.3.2016 (Supra) as under:- 8. We have heard both the parties and perused the records, especially the orders of the revenue authorities, state .....

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survey under section 133A of the Act, in view of the various judicial decisions wherein, it has been held that such statement does not have any evidentiary value, especially the decision of the Hon ble Madras High Court in the case CIT vs. S. Khakder Khan son reported in {2008) 300 ITR 157 (Madras) wherein, it has been held that Addition on the basis of statement recorded during survey under section 133A-Sect. 133A does not empower any IT Authority to examine any person on oath, hence, any such .....

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s. We also find force in the assessee s counsel contention that in view of the CBDT s Letter issued vide F.No. 286/2/2003-IT (Inv.) dated 10th March, 2003 the addition made by the AO and confirmed by the Ld. CIT(A) is not sustainable in the eyes of law. For the sake of clarity we are reproducing the contents of the CBDT s letter dated 10.3.2003 as under:- F.No. 286/2/2003-IT (Inv) Government of India, Ministry of Finance & Company Affairs, Department of Revenue Central Board of Direct Taxes, .....

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ons, if not based upon credible evidence, are later retracted by the concerned assessees while filing returns of income. In these circumstances, on confessions during the course of search & seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on' collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Departments. Simil .....

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